More CFOs Choosing Transformation Over Mere Digitization As AP/AR Function Morphs

Of all the weird notes on which 2021 began, it was a wave of chief financial officer (CFO) resignations that vied for the most head-scratching headlines, like The Wall Street Journal blaring that “More Finance Chiefs Resigned in 2020 Than in Previous Years” — up nearly 30 percent from 2019 alone. What’s up with typically reserved, super-cautious CFOs in 2021?

For some, it was said to be the stress of operating finance teams working from home. Just the thought of sensitive accounting data being transmitted via home Wi-Fi connections frayed CFOs’ nerves to the breaking point. Others used the pandemic as an opportunity to change jobs and industries. However, there’s an increasing consensus that the role of the CFO is shifting to be more strategic than ever, as they’re pressed to take on a technologist’s mindset, and more.

And a PYMNTS study conducted in the depths of 2020 lockdowns on CFOs’ attempts to digitize operations virtually overnight found that 91 percent of surveyed businesses making $10 million to $100 million in annual revenues “automated to boost the ‘efficiency and performance’ of their [AP/AR] processes” during lockdowns, as did a majority of the survey sample in that case.

Small and medium businesses (SMBs) are struggling with the transformation of the accounting function in a big way. As American Express Executive Vice President of Global Commercial Payments Dean Henry recently told PYMNTS, “There’s a small group of people trying to get through a large number of invoices in an accounts payable department, and they need solutions to pay in a more automated and easy way.”

Taken together with other developments, what’s emerging is a portrait of a critical corporate role being reshaped by the great digital shift, ready or not. But businesses needn’t be blindsided by the reformation of accounting. Making the correct tech choices is crucial.

For example, application programming interfaces (APIs) saved the day in numerous ways. “APIs are becoming a very common request in the payment space,” Kim Vodicka, vice president of commercial operations at Dell Financial Services, a division of Dell Technologies, told PYMNTS. “The more information and flexibility we can provide the customer about their assets and amounts due, the more able our customers are to make on-time, accurate payments.”

Fast-forward to Q2 2021, and the accounting function is intertwined with more digital muscle and rich data than ever, creating fascinating new approaches to greater efficiency and security.

PYMNTS’ June 2021 study The Strategic Role of the CFO: How AP and AR Digitization Are Transforming Customer Relationships, surveyed 400 CFOs in March and April, noting that “CFOs are adopting a wider view of AP/AR modernization, one that is comprehensive, strategic and customer-driven. Payments are no longer viewed merely as a back-office function to be ironed out long after a contract or purchase order is signed. CFOs instead increasingly view seamless and effective payment capabilities as essential to acquiring customers, maintaining long-term loyalty and accelerating cash flow.” In a word: strategic.

Which AP/AR workflows benefit most from automation, CFOs’ reasons for focusing on certain areas in need of process change — rather than just another piece of tech — as well as a look at the customer-centricity permeating accounting departments are all on the table now.

For more about this, join PYMNTS CEO Karen Webster and a panel of industry experts from Versapay and Twilio as they dissect findings from the landmark study The Strategic Role of the CFO, Monday, July 12, 2021 @ 12:00 p.m. ET on PYMNTS TV.